Business Terms Glossary

What Is Gross Margin?

Gross margin is the difference between total sales revenue and total cost of goods sold (also called total cost of sales). This can also be expressed on a per unit basis, as the difference between unit selling price and unit cost of goods sold. Gross margin can be expressed in dollar or percentage terms.


What Are Operating Expenses?

Operating expenses are expenses incurred in conducting normal business operations. Operating expenses may include wages, salaries, administrative and research and development costs, but excludes interest, depreciation, and taxes. To learn more, check out How to Create an Expense Budget.


What Is Capital Expenditure?

Spending on capital assets (also called plant and equipment, or fixed assets, or long-term assets). Capital assets are long-term assets, also known as fixed assets.


What Is Website Traffic?

In broad, general terms, website traffic is the number of visitors and visits a website receives. This traffic can be measured by a variety of website metrics.


What Are Materials Included in the Cost of Sales?

These are materials involved in the assembly or manufacture of goods for sale.


What Is Short-Term?

Short-term is normally used to distinguish between short-term and long-term, when referring to assets or liabilities. Definitions vary because different companies and accountants handle this in different ways. Accounts payable is always a short-term liability, and cash, accounts receivable and inventory are always short-term assets. Most companies call any debt of less than five-year terms...


Who Is Everett Rogers?

Everett Rogers is an author who studied and published work on the diffusion of innovation.


What Is Gross Margin Percent?

The gross margin percent is the gross margin divided by sales, displayed as a percentage. Acceptable levels depend on the nature of the business. There are providers who can deliver standard gross margins for different types of industries based on SIC (Standard Industry Classification) codes that categorize industries.


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